WorldCom: Organizational Culture and Unethical Safeguards Organizational culture is one of four influences whether an ethical or unethical behavior will be made. WorldCom’s demise, deliberately overstating their income by $7 billion between 1999 and 2002; and their once valued stock of $180 million becoming nearly worthless, can attribute a significant amount of their failure on their “dis”organizational culture. Corporations worldwide who do not think this type of fraud can happen at the hands of a relatively small amount of people, are completely wrong. Bernie Ebbers, Chief Executive Officer, and Chief Financial Officer, Scott Sullivan’s classical view of social responsibility was the beginning of the end for WorldCom; this
Some refused; and some were promoted with raises to continue the fraudulent reporting. Managers from different departments began turning against each other,
…Myers asked Timothy Schneberger, director of international fixed cost, to release $370 million in accruals. “Here’s your number,” Myers reportedly told Schneberger, asking him to book the $370 million adjustment. Yates, director of General Accounting, told Schneberger the request was from “the Lord Emperor, God himself, Scott [Sullivan].” When Schneberger refused to make the entry and also refused to provide the account number to enable Myers to make the entry, Betty Vinson, a senior manager in General Accounting, obtained the account number from a low-level analyst in Schneberger’s group and had one of her subordinates make the entry (Kaplan & Kiron, 2007, p. 5).
It finally took Cynthia Cooper, headstrong whistle-blower of WorldCom’s 24-member internal audit department to bring down the whole corporation, with the help of the Security Exchange Commission, once she began asking questions. Looking back, Richard Breeden (2003) sums up the importance of organizational culture and its importance in ethical decision making, “…Inattention to healthy practices in compensation and internal controls, for example, can allow problems to grow